Tradition has it that when a new Austrian government is sworn in they walk the short distance across Vienna's Ballhaus square to the imperial palace, basking in their success and greeting well-wishers along the way.

Last February there were few well-wishers to be found amongst the paint-throwing, whistle-blowing, stone-hurling crowds who had tied black ribbons to the trees in angry protest at the new incumbents.

Chancellor Wolfgang Schüssel was forced to lead his cabinet through an underground passageway from Vienna's chancellery to the palace where their first meeting was to be held.

The protesters were vocalising a Europe-wide wrath that Schüssel's conservative People's party (ÖVP) which had come third in elections the previous October, had made a coalition pact with populist firebrand Jörg Haider, allowing his far-right Freedom party (FPÖ), which had gained over a quarter of the vote, into power.

Pictures of President Thomas Klestil, steely-faced as he swore in a government of which he thoroughly disapproved, went round the world. The European Union immediately slapped sanctions on Austria and overnight the land of the Sound of Music became a pariah state.

Recalling those heady days in a background press talk held recently in the winter garden of a hotel in Vienna city centre, a high-ranking ÖVP politician chuckled: "Now we're sitting in a glass house, but a year ago we had to go via a tunnel for our swearing-in ceremony."

He curiously seemed to see it as a metaphor for the stability the alpine republic has reverted to in such a short time. Nobody pointed out to him how vulnerable people in glass houses can be.

But he is quite right in thinking that the dust has largely settled following elections which shook up an all too cosy political scene that had dominated Austrian politics for years.

It pushed the Social Democrats into opposition, ending their staggeringly long 30-year grip on the chancellery. Few disagree that such a shake-up was long overdue.

The EU sanctions that disappeared in a puff of smoke in September after they were deemed more harmful than helpful by three wise men from Brussels have now more or less been consigned to the history books.

And according to economic observers, they did little harm to Austria's economy: two of their biggest exports, Red Bull and Wolford tights have reported no slump in demand. Tourism is booming.

And while last year Belgium's foreign minister was declaring that it was "immoral to ski in Austria", launching an ad campaign for Belgian resorts showing an Austrian skier forming a swastika on his downhill run, this year Austria's St Anton is hosting the world's skiing championships.

The reaction shown by the outside world shocked most Austrians to the core, but it also forced them to deal with many issues linked to the past which have been constantly pushed onto the Germans, or under the carpet.

Most significantly, although not before time, a compensation fund for Nazi-era slave labourers and those deprived of their property by the Nazis is now in full swing.

Other reforms are underway, including a huge wave of privatisation, moves to cut the infamous bureaucracy and a long-term stability programme to cancel a large budget deficit.

But the unease about a country which collaborated closely with Nazi Germany and just over half a century later voted for a party whose leader had shown himself sympathetic to Nazi policies certainly remains.

Relations between Vienna and its European partners, Paris and Berlin in particular, remain cool.

And this week the fierce criticism received by the Count and Countess of Wessex for simply being caught on film with Haider's successor as FPÖ leader, Susanne Riess-Passer, proved how damaging the prominence of the FPÖ continues to be to Austria's image abroad.

And what of the man at the eye of the storm, who benefited from Austrians' yearning for the new but who then renounced his leadership post to vice-chancellor Riess-Passer in May and retreated to the southern province of Carinthia where he is governor?

Observers and acquaintances say the 51-year-old has now all but given up his lifelong dream to become chancellor, realising that there's hardly a leader in Europe who would dare to be seen shaking his hand.

He snarls from the sidelines now and again, this week telling French president Jacques Chirac to stop behaving like Napoleon, but has largely lost the magic charm that won his party so many votes and is said to be bitter that although he remains its most dominant figure, his party appears to do just fine without him.

Or maybe not. Despite its strong showing 16 months ago, the FPÖ is struggling in the polls, putting in poor performances in regional elections and it's expected to suffer badly in Vienna's local elections next month.

On the streets of Vienna the fight is still on to oust the government. Every Thursday evening a mix of young and old meet in front of the parliament building, demonstrating against a government which is identified by the party colours which make it up - black for the conservatives, blue for the Freedom party.

As up to 10,000 gathered last week to mark the coalition's first anniversary, one woman held a banner which read: "Stop! Austria has been black and blue for long enough."